Global oil prices won't decline until 2023: World Bank

The stunning recent runup in global oil prices could threaten economic growth and is unlikely to retreat until 2023, the World Bank said Thursday.

Average crude prices are expected to end the year at $70 a barrel, 70 per cent higher than in 2020, according to the latest Commodity Markets Outlook.

That in turn is pushing up other energy prices like natural gas, the report said.

"The surge in energy prices poses significant near-term risks to global inflation and, if sustained, could also weigh on growth in energy-importing countries," said World Bank chief economist Ayhan Kose.

The increases have been "more pronounced than previously projected" and "may complicate policy choices as countries recover from last year's global recession."

Oil prices in recent weeks have surged above $80 a barrel, the highest point in years, as economies reopen following the pandemic shutdowns and amid shipping bottlenecks.

The World Bank uses an average of Brent, West Texas Intermediate and Dubai which it said will "remain at high levels in 2022 but will start to decline in the second half of the year as supply constraints ease."

The 2022 average is projected to rise to $74 before falling to $65 in 2023, the World Bank said.

But the report warns that "additional price spikes may occur in the near-term amid very low inventories and persistent supply bottlenecks."